Yield Reduction and Fixed Cost Absorption
Definition
During 2019-22, FCNSW reduced harvesting yield of native hardwood timbers by approximately 50% compared to 2016-19, driven by 2019 bushfires and 2021 flooding. Fixed administrative costs could not be proportionally reduced, amplifying per-tonne losses.
Key Findings
- Financial Impact: 50% volume reduction with fixed costs → increased per-unit cost absorption; contributes to AUD $4.67/gmt loss versus AUD $3.96/gmt prior period
- Frequency: Occurred during 2019-22 review period; ongoing risk in climate-affected regions
- Root Cause: Supply disruption from natural disasters; inflexible cost structure
Why This Matters
The Pitch: Timber operators lose efficiency gains when harvest volumes drop. Dynamic cost reallocation and capacity planning during disruptions prevents margin erosion.
Affected Stakeholders
Operations Planning, Cost Accounting, Risk Management
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Unrecovered Harvesting and Haulage Costs in Native Timber Operations
Plantation Forestry Ineligibility Fines
ACCU Compliance Penalties
ACCU Fraud Relinquishment
ACCU Project Registration Delays
Easement Registration Fees
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